Intel reported the second straight annual decline in quarterly revenue at its Data Centre Group, which handles customers in the cloud, enterprise and government sectors.

CEO Pat Gelsinger highlighted 5G as a bright spot for the chipmaker’s data centre sales in Q1, which were otherwise impacted by a slowdown following high demand for cloud services at the peak of the Covid-19 (coronavirus) pandemic.

Revenue at the unit fell 20 per cent year-on-year to $5.6 billion, after also registering an annual decline in Q4 2020.

CFO George Davis said the trend will reverse itself in the current quarter, with “growth in all areas of data center”, and cloud services in particular.

Intel’s earning statement tempered expectations by noting the data centre unit could be negatively impacted by US vendor bans “and industry-wide supply constraints”.

Gelsinger highlighted the value of Intel’s growing foundry operations in the US: “The world needs more semiconductor capacity”, he said, adding there is a global need for “a more balanced supply chain”.

“We’re seeing industry say that, we’re seeing government say that and we’re uniquely positioned to fulfill that.”

During Q1, net income fell 41 per cent to $3.4 billion on revenue of $19.7 billion, 1 per cent lower.